Former SEC Enforcement Official and Duke Scholar Urge Crypto Rule Withdrawal

John Reed Stark, a former SEC enforcement official, and Duke University finance scholar Lee Reiners urged the SEC to withdraw its proposed crypto rules over investor protection concerns. In their Oct. 16 comment, Stark and Reiners argued that the proposal exceeds the SEC’s authority and would weaken safeguards for investors. They said existing securities law, including the Supreme Court’s Howey test, already provides a framework for crypto offerings. Their objection targets Regulation Crypto Assets, which would let eligible startups raise up to $5 million over four years and qualifying projects raise up to $75 million in any 12-month period. The exemptions would carry disclosure requirements, and federal antifraud rules would still apply.

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